More like a few billions. Considering that Apple is going to offer the service on Android there is a potential for more than 1 billion trials. Paying the 3 month subscription in full would mean something like 21 billion dollars. Probably will only pay a fraction of that but it can still be a few billion, a lot more than potential profits in the near future for all the streaming industry.
I had the same exact thought. At the same thought, I think Apple kind of messed this one up. First, they should have eaten the cost from the get go - they could have expensed it as marketing/client capturing cost. I am sure they must have know what.
Apple would have been attacked ommediately by Spotify, Amazon... and in the end the DOJ for anti-competitive behavior.... as has already been speculated as to the reason why Apple did this in another thread and by industry insiders far more knowledgeable than you.
Now, even after knowing that it didn't go well - they should have stuck it out and provided some explanation on why the are doing this. I know Steve wouldn't have caved like this right away. I think he did a great job dealing with Antennagate! Yes, he did gave out those bumpers afterward, but he did so after showing us all on how Apple did testing and compare the results against other smart phone devices, which also had similar issue.
BS! This is straight out of the Steve Jobs Playbook. The guy was a master negotiator that he's not often given credit for. Not only his charm and power of persuasion, but also his studying of Zen and The Art of War by Sun Tzu made him one of the toughest people ever to sit at the big boys poker table.
Never forget, this guy still in his youth, talked Xerox... and later AT&T into giving HIM and Apple power over their own companies and products. Xerox for instance didn't even wake up to the fact until years later that they'd been hood-winked. AT&T made out like a bandit in the end, but at the time most of AT&T's competition thought that they had just blown a ton of money and were the stupidest carrier on the planet for acquiescing to the master marketer AKA Steve Jobs' Reality Distortion Field™.
I'm continuously amazed at how so many here on this board are so blind and inexperienced in negotiations, and for some reason think that Tim Cook and Team are doing this for the first time. Does anyone here really think that they didn't discuss this very scenario in multiple meetings among themselves? That they haven't been through this literally hundreds of times before with all of their suppliers?
Apple has done one of the shrewdest plays I've seen in a long time playing their adversary AND social media to do what they want them to, effectively "killing 2 (or more) birds with one stone" as their goal.
1) as EricTheHalfBee stated, now ALL of the hold-out labels and artists have to be available on Apple Music and can't hold out for anything more, or else they'll be raked over the coals by their own fans as "greedy";
2) any DOJ anti-competitive inquiries... or requests for the same by competitors, Apple has the "Get Out Of Jail" card that Taylor Swift and the labels just handed to them by doing exactly what Apple expected them to. It will now be up to the DOJ to prove that Apple initially negotiated in bad faith to pull this trick.
Why any of you think Apple, it's management and lawyers are on the same level as you negotiating the purchase of a used car, is beyond my comprehension :rolleyes:
I think you're reading your own post hoc reasoning into this. Lots of large companies make mistakes. I'm yet to be convinced the Beats acquisition isn't a flop.
If Apple thought they would have to pay, or might be forced to, they would have reduced their initial offer to a month. Or weeks.
As it is if they offer to pay $10 per month for all free subscribers across all their 800M devices it could end up being materially very costly, enough to affect the forward guidance on profits in the next conference call.
I think it's the right thing to do, I'm glad they changed direction. I predicted on this board yesterday that they would.
If it's $10/mo and 70% of that goes to the artist, and Apple are now subsidising 3 months free for everyone, does that mean every new signup will now cost them $21?
This show of weakness will kill their ability get any kind of leverage on deals going forward. They have effectively given away their ecosystem advantage . . . to Taylor Swift. The TV service will never get off the ground without Apple paying through the nose for it, if it gets off the ground at all. Every little outcry by competitors and Apple-haters will be met with capitulation until the money pile is whittled away to nothing
This has been a PR disaster since the day Apple Music spluttered and limped on stage (at a developer's conference no less!) and culminating in this. The headlines won't read that Apple did the right thing; they'll say that Apple caved, and that's what content providers will remember as they walk smiling into negotiations with Cue. If we create a stink, Apple will cave.
I've seen several people saying the presentation had been bad. I feel we've seen two different keynotes. It deserved the "one more thing".
I think it's the right thing to do, I'm glad they changed direction. I predicted on this board yesterday that they would.
If it's $10/mo and 70% of that goes to the artist, and Apple are now subsidising 3 months free for everyone, does that mean every new signup will now cost them $21?
I did not expect that as it goes against their very model of no partner pay if they make no pay. This does one thing though. It pretty much kills the competition. They are not going to be able to match this without ads which pays super low rates. Spotify is officially dead.
Taking it one step further, it they are in the hole $21 for each customer at the end of the 3 month trial, and Apple only get $3 of the $10 monthly subscription for themselves, then each customer will have to be a paying customer for 7 months after their trial before Apple even breaks even on them.
Impressive how stupid the original decision was. Who would have imagined that some people might have an issue with giving away 3 months of work for free?
The difference is they were just trying it out. Any downloads would vanish if they cancelled.
I've seen several people saying the presentation had been bad. I feel we've seen two different keynotes. It deserved the "one more thing".
My issue with it was, it's a developer conference and it was abused as a general-public keynote. It's for Apple to decide what they want to do, of course, but it feels weird and out of touch, like making an obvious hark like Iovine a face for Apple. This man creeps me out...
Taylor Swift is an attention-whore, using "indie artists" as a ruse for her greediness. Still, it's pretty incredible and impressive how quickly today's Apple listens to feedback and makes changes, in order to avoid potential further negative PR.
Impressive how stupid the original decision was. Who would have imagined that some people might have an issue with giving away 3 months of work for free?
While it may look stupid, Apple may have played a gambit.
(1) no public outcry, Apple wins.
(2) Public outcry, Apple backtracks - Now the small music streamers can't say Apple was intending unfair pricing, because Apple was forced to do this - Apple wins.
I've seen several people saying the presentation had been bad. I feel we've seen two different keynotes. It deserved the "one more thing".
My issue with it was, it's a developer conference and it was abused as a general-public keynote. It's for Apple to decide what they want to do, of course, but it feels weird and out of touch, like making an obvious hark like Iovine a face for Apple. This man creeps me out...
It was a horrible presentation! Iovine barely knew the three points to make. I was amused at how quickly his opening accent/brogue ended once he got going. The only way this could have gotten worse was if some no-name finished it off... oh wait... nevermind.
FM Radio was always a free service and artists were still paid royalties.
Good to see Apple do the right thing, even if they have to be coerced, shamed, and manipulated into it.
Artist don't get paid for radio play it's free promotion that hopefully gets sales. Royalties go to the songwriters and publishing companies which many times are not the artist. Pandora actually cuts them out.
Impressive how stupid the original decision was. Who would have imagined that some people might have an issue with giving away 3 months of work for free?
Well it's all negotiations. Somebody, on behalf of the Artists, agreed to that. For sure, Apple didn't go ahead and said "we give 3 months free trial, and sorry of course since we get paid you are also not getting paid".
I think you're reading your own post hoc reasoning into this. Lots of large companies make mistakes. I'm yet to be convinced the Beats acquisition isn't a flop.
If Apple thought they would have to pay, or might be forced to, they would have reduced their initial offer to a month. Or weeks.
As it is if they offer to pay $10 per month for all free subscribers across all their 800M devices it could end up being materially very costly, enough to affect the forward guidance on profits in the next conference call.
You miss the point. They will not get a percentage of the $10 until after the trial. The payout is a per stream rate likely equivalent to what they pay for iTunes Radio streams.
Comments
Android users will not get a free trial.
Apple would have been attacked ommediately by Spotify, Amazon... and in the end the DOJ for anti-competitive behavior.... as has already been speculated as to the reason why Apple did this in another thread and by industry insiders far more knowledgeable than you.
BS! This is straight out of the Steve Jobs Playbook. The guy was a master negotiator that he's not often given credit for. Not only his charm and power of persuasion, but also his studying of Zen and The Art of War by Sun Tzu made him one of the toughest people ever to sit at the big boys poker table.
Never forget, this guy still in his youth, talked Xerox... and later AT&T into giving HIM and Apple power over their own companies and products. Xerox for instance didn't even wake up to the fact until years later that they'd been hood-winked. AT&T made out like a bandit in the end, but at the time most of AT&T's competition thought that they had just blown a ton of money and were the stupidest carrier on the planet for acquiescing to the master marketer AKA Steve Jobs' Reality Distortion Field™.
This coup has SJ written all over it.
Android users will not get a free trial.
Yes they will. All platforms get the three month trial, but only users with an Apple ID get access to the free tier (Connect/Beats 1).
I think you're reading your own post hoc reasoning into this. Lots of large companies make mistakes. I'm yet to be convinced the Beats acquisition isn't a flop.
If Apple thought they would have to pay, or might be forced to, they would have reduced their initial offer to a month. Or weeks.
As it is if they offer to pay $10 per month for all free subscribers across all their 800M devices it could end up being materially very costly, enough to affect the forward guidance on profits in the next conference call.
I think it's the right thing to do, I'm glad they changed direction. I predicted on this board yesterday that they would.
If it's $10/mo and 70% of that goes to the artist, and Apple are now subsidising 3 months free for everyone, does that mean every new signup will now cost them $21?
I've seen several people saying the presentation had been bad. I feel we've seen two different keynotes. It deserved the "one more thing".
I think that's right.
Taking it one step further, it they are in the hole $21 for each customer at the end of the 3 month trial, and Apple only get $3 of the $10 monthly subscription for themselves, then each customer will have to be a paying customer for 7 months after their trial before Apple even breaks even on them.
I've seen several people saying the presentation had been bad. I feel we've seen two different keynotes. It deserved the "one more thing".
My issue with it was, it's a developer conference and it was abused as a general-public keynote. It's for Apple to decide what they want to do, of course, but it feels weird and out of touch, like making an obvious hark like Iovine a face for Apple. This man creeps me out...
While it may look stupid, Apple may have played a gambit.
(1) no public outcry, Apple wins.
(2) Public outcry, Apple backtracks - Now the small music streamers can't say Apple was intending unfair pricing, because Apple was forced to do this - Apple wins.
Sometimes the long way around is needed.
It was a horrible presentation! Iovine barely knew the three points to make. I was amused at how quickly his opening accent/brogue ended once he got going. The only way this could have gotten worse was if some no-name finished it off... oh wait... nevermind.
I'm not sure the Android version of the app will be available right out the gate... Maybe yes, maybe no...
Artist don't get paid for radio play it's free promotion that hopefully gets sales. Royalties go to the songwriters and publishing companies which many times are not the artist. Pandora actually cuts them out.
Impressive how stupid the original decision was. Who would have imagined that some people might have an issue with giving away 3 months of work for free?
Well it's all negotiations. Somebody, on behalf of the Artists, agreed to that. For sure, Apple didn't go ahead and said "we give 3 months free trial, and sorry of course since we get paid you are also not getting paid".
You miss the point. They will not get a percentage of the $10 until after the trial. The payout is a per stream rate likely equivalent to what they pay for iTunes Radio streams.
Do you have a link saying Android will have free trial? That contradicts with what I read before.
You know Android will not get Apple Music app until at least 3 months after the launch, right?